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Nordby v. Anchor Hocking Packaging Co.

United States Court of Appeals, Seventh Circuit
Dec 2, 1999
199 F.3d 390 (7th Cir. 1999)

Summary

holding that "any ambiguities in a Rule 68 offer must be resolved against the [offeror]"

Summary of this case from Johnson ex rel. S.J. v. Hyatt Hotels Corp.

Opinion

Nos. 98-4161, 99-1146

ARGUED NOVEMBER 3, 1999

DECIDED DECEMBER 2, 1999

Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 97 C 823 — Milton I. Shadur, Judge.

Stanley J. Adelman, Tracy L. Bradford (argued), Piper, Marbury, Rudnick Wolfe, Chicago, IL, for plaintiff-appellee.

Joseph R. Marconi (argued), Johnson Bell, Chicago, IL, for defendant-appellee.

Before Posner, Chief Judge, and Coffey and Rovner, Circuit Judges.


Rule 68 of the Federal Rules of Civil Procedure authorizes a defendant to make an offer of judgment "for the money . . . specified in the offer, with costs then accrued." If the plaintiff refuses the offer and goes on to win at trial but wins less than the amount of the offer, the plaintiff must pay the costs incurred by the defendant from the time of making the offer. If, as in this case — a suit by a sales representative for breach of contract and statutory violations — the plaintiff accepts the offer within ten days, judgment is entered for him.

The offer here was for "judgment in the amount of $56,003.00 plus $1,000 in costs as one total sum as to all counts of the amended complaint." One of the counts of the complaint was for violation of the Illinois Sales Representative Act, 820 ILCS 120/1 et seq. The Act expressly provides for an award of reasonable attorneys' fees to the sales representative whose rights under the Act have been violated, 820 ILCS 120/3, and so the count that is based on the Act expressly requested attorneys' fees as well as damages.

The plaintiff accepted the defendant's Rule 68 offer and then moved the district court for an award of attorneys' fees pursuant to the Illinois Act. The court turned him down on the ground that the offer that he had accepted was inclusive of attorneys' fees.

In the case on which the plaintiff primarily relies, Webb v. James, 147 F.3d 617, 623 (7th Cir. 1998), this court held that any ambiguities in a Rule 68 offer must be resolved against the defendant, that is, the offeror, not only because the defendant drafted the offer but also because the plaintiff is being asked to give up his right to a trial. See also Gavoni v. Dobbs House, Inc., 164 F.3d 1071, 1076 (7th Cir. 1999). We add that an ambiguous offer places the plaintiff in an uncomfortable position. Not knowing the actual value of the offer, he can't make an intelligent choice whether to accept it — and there are consequences either way. For unlike the case of an ordinary contract offer, the offeree cannot reject it without legal consequences, since if he rejects it and then doesn't do better at trial he has to pay the defendant's post-offer costs. 12 Charles Alan Wright, Arthur R. Miller Richard L. Marcus, Federal Practice and Procedure § 3002, pp. 94-96 (2d ed. 1997).

The offer in Webb was "of judgment in the above-captioned matter in the amount of Fifty Thousand Dollars ($50,000)." 147 F.3d at 619. It was unclear whether attorneys' fees were included, since such fees are often sought as an add-on to the judgment. That is the basis of the rule that the judgment and the award of attorneys' fees are separate appealable orders. E.g., Budinich v. Becton Dickinson Co., 486 U.S. 196, 202-03 (1988); In re Stoecker, 5 F.3d 1022, 1026 (7th Cir. 1993); Kirkpatrick v. Shaw, 70 F.3d 100, 102 n. 1 (11th Cir. 1995) (per curiam). In other words, "judgment" can mean either the substantive relief ordered (whether legal or equitable), or that plus attorneys' fees. The defendants in Webb failed to indicate which they meant, and this made their offer ambiguous.

There is no ambiguity here. "[O]ne total sum as to all counts of the amended complaint" can only mean one amount encompassing all the relief sought in the counts. One of those counts specified attorneys' fees as part of the relief sought. That relief was covered by the offer. We are mindful that Stewart v. Professional Computer Centers, Inc., 148 F.3d 937 (8th Cir. 1998), held that an ambiguous offer that the defendant then clarified by offering judgment "on any or all counts against Defendant in a total amount not to exceed $4,500" — and some of the counts requested attorneys' fees, just as in this case — was nevertheless incurably ambiguous. But the ambiguity lay not in the terms of clarification but in the fact that the plaintiff had coupled its acceptance of the offer with a request for attorneys' fees. This led the court to conclude that the plaintiff may not have understood the offer to be inclusive of attorneys' fees. If the request for fees was deemed a part of the plaintiff's "acceptance," then it was not an acceptance but a counteroffer, which Rule 68 does not authorize and which in any event was not accepted. See also Radecki v. Amoco Oil Co., 858 F.2d 397 (8th Cir. 1988); Johnson v. University College, 706 F.2d 1205, 1209 (11th Cir. 1983).

We need not decide whether we agree that the plaintiff's acceptance of the defendant's Rule 68 offer in Stewart was really a counteroffer, a characterization rendered doubtful by the fact that the acceptance and the fee demand were not simultaneous. The important thing is that the Stewart line of cases approaches the interpretation of a Rule 68 offer and acceptance as an issue of contract law, and so approached there is no doubt that by accepting the defendant's offer the plaintiff in our case abandoned any right to seek attorneys' fees for which he had asked in any of the counts of his complaint. He accepted an unambiguous offer, and there is no argument that the acceptance was really a counteroffer.

Granted, the contract-law analogy is just that, an analogy, for the reason stated earlier: the consequences of rejecting a Rule 68 offer are more serious than those of rejecting an ordinary contract offer. But the appropriate adjustment is to insist that the Rule 68 offer be completely unambiguous, not that it use the magic words "attorneys' fees."

We might have a different case if instead of seeking an award of attorneys' fees specified in one of the counts, the plaintiff were seeking an award of fees under a statute or rule or common law principle not cited in any of the counts of the complaint, authorizing an award of fees to a prevailing party. Then it would be arguable that the reference to "one total sum as to all counts" did not include such an award. But the only attorneys' fees being sought here are those authorized by the count that charges a violation of the Illinois Sales Representative Act. And even a request for an award of fees "off count," that is, for an award of fees under a rule or statute or doctrine not mentioned in any of the counts of the complaint, would not have availed the plaintiff here if the rule or statute or doctrine made attorneys' fees awardable as "costs," since the defendant's Rule 68 offer capped costs at $1,000. In short, if the fees that the plaintiff is seeking in this case are part of the substantive relief they are covered by the part of the Rule 68 offer that refers to the judgment, and if they are part of the costs that the plaintiff is seeking then they are covered by the part of the offer that refers to costs.

We reaffirm the holding of Webb that ambiguities in Rule 68 offers are to be resolved against the offerors. But we reject a magic-words approach suggested in some cases, such as Nusom v. Comh Woodburn, Inc., 122 F.3d 830, 833-34 (9th Cir. 1997), in favor of an approach well illustrated by Arencibia v. Miami Shoes, Inc., 113 F.3d 1212 (11th Cir. 1997) (per curiam), that gives effect to an unambiguous offer even if it does not mention attorneys' fees explicitly. (The prudent defendant, however, will mention them explicitly, in order to head off the type of appeal that we have been wrestling with here. Cf. Fletcher v. City of Ford Wayne, 162 F.3d 975, 977-78 (7th Cir. 1998).) We agree with the district judge that there was no ambiguity and also that the sanctions challenged in the cross-appeal were properly assessed. The judgment is therefore

Affirmed.


Summaries of

Nordby v. Anchor Hocking Packaging Co.

United States Court of Appeals, Seventh Circuit
Dec 2, 1999
199 F.3d 390 (7th Cir. 1999)

holding that "any ambiguities in a Rule 68 offer must be resolved against the [offeror]"

Summary of this case from Johnson ex rel. S.J. v. Hyatt Hotels Corp.

holding that "any ambiguities in a Rule 68 offer must be resolved against the [offeror]"

Summary of this case from Real Estate Pros, P.C. v. Byars

finding that the plaintiff's acceptance was not a counteroffer because he had accepted the defendants' unambiguous offer without qualification

Summary of this case from Peck v. IMC Credit Servs.

concluding that Rule 68 offer for "`judgment in the amount of $56,003.00 plus $1,000 in costs as one total sum as to all counts of the amended complaint'" included attorney's fees in part because such fees were specified as the relief sought in one of the substantive counts of the complaint damages and noting that the outcome might be different "if instead of seeking an award of attorneys' fees specified in one of the counts, the plaintiff were seeking an award of fees under a statute or rule or common law principle not cited in any of the counts of the complaint, authorizing an award of fees to a prevailing party"

Summary of this case from Bosley v. Mineral County Com'n

affirming denial of attorneys' fees where plaintiff accepted an unambiguous offer

Summary of this case from Steiner v. Lewmar, Inc.

affirming denial of attorneys' fees where the plaintiff accepted an unambiguous offer

Summary of this case from Labarca v. GRJH, Inc.

rejecting "a magic-words approach ... in favor of an approach ... that gives effect to an unambiguous offer even if it does not mention attorneys' fees explicitly"

Summary of this case from Steiner v. Lewmar, Inc.

rejecting "a magic-words approach ... in favor of an approach ... that gives effect to an unambiguous offer even if it does not mention attorneys' fees explicitly"

Summary of this case from Labarca v. GRJH, Inc.

In Nordby, we found that a Rule 68 offer that provided for “judgment in the amount of $56,003.00 plus $1000 in costs as one total sum as to all counts of the amended complaint” was not silent and that the specific amount for “costs” was sufficiently clear to include attorney fees. 199 F.3d at 391–92.

Summary of this case from Sanchez v. Prudential Pizza, Inc.

repeating principle that ambiguities in a Rule 68 offer must be resolved against the offeror

Summary of this case from Sanchez v. Prudential Pizza, Inc.

In Nordby, the Rule 68 offer of judgment was for "'judgment in the amount of $56,003.00 plus $1,000 in costs as one total sum as to all counts of the amended complaint.'"

Summary of this case from Labarca v. GRJH, Inc.

noting that the court's conclusion that the offer of judgment was unambiguous might have been different if the plaintiff sought an award of fees pursuant to some other authority rather than attorney's fees specified in one of the counts

Summary of this case from CRUX SUBSURFACE, INC. v. BLACK VEATCH CORP.

reasoning that ambiguities in a Rule 68 offer "must be resolved against the defendant . . . not only because the defendant drafted the offer but because the plaintiff is being asked to give up his right to a trial."

Summary of this case from Stonebrae, L.P. v. Toll Bros., Inc.

In Nordby the court held that an offer of judgment that provided for "judgment in the amount of $56,003.00 plus $1,000 in costs as one total sum as to all counts of the amended complaint" unambiguously included attorney's fees, even though they were not mentioned. Id. at 391-92.

Summary of this case from Barrow v. Greenville Independent School District

In Nordby, the court demonstrates a willingness to utilize an approach that "gives effect to an unambiguous offer even if it does not mention attorneys' fees explicitly."Id. at 393.

Summary of this case from McCain v. Detroit II Auto Finance Center, Inc.

In Nordby, the defendant's offer of judgment was for "judgment in the amount of $56,003.00 plus $1,000 in costs as one total sum as to all counts of the amended complaint."

Summary of this case from McCain v. Detroit II Auto Finance Center, Inc.

In Nordby, the plaintiff also relied on Webb v. James, but the Seventh Circuit distinguished Webb, noting that there was no ambiguity in defendant's offer of judgment.

Summary of this case from McCain v. Detroit II Auto Finance Center, Inc.

In Nordby, the Seventh Circuit held that the offer of judgment was unambiguous and that it included costs, reasoning that since the offer was unambiguous, the plaintiff could not seek recovery of costs after the acceptance of the offer.

Summary of this case from Aynes v. Space Guard Products Inc, (S.D.Ind. 2001)

In Nordby, Chief Judge Posner affirmed that "ambiguities in Rule 68 offers are to be resolved against the offerors;" however, he rejected the "magic-words approach... in favor of an approach... that gives effect to an unambiguous offer even if it does not mention attorneys fees explicitly."

Summary of this case from Montana Fair Housing v. Barnes

In Nordby, language similar to that used here was found to have encompassed the plaintiff's claim for attorney fees. I do not find it necessary, for purposes of this case, to distinguish Nordby on the grounds that the language there was used by the party making the offer, while the similar language here was used by the party accepting the offer.

Summary of this case from Montana Fair Housing v. Barnes

In Nordby, the plaintiff included a demand for attorney fees in its complaint, and the defendant offered to settle for "[o]ne total sum as to all counts of the amended complaint."

Summary of this case from Bumbal v. Smith
Case details for

Nordby v. Anchor Hocking Packaging Co.

Case Details

Full title:A. Eugene Nordby, Plaintiff-Appellant/Cross-Appellee, v. Anchor Hocking…

Court:United States Court of Appeals, Seventh Circuit

Date published: Dec 2, 1999

Citations

199 F.3d 390 (7th Cir. 1999)

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